The FTSE 100 is within less than 100 points of a serious test of the potentially strong resistance at the 5108 level. Indeed this rally now having lasted for the last 9 weeks we now have the potential for the (9-week) cycle to play its part and to hold down the index from any further increase and, later, to perhaps see it retrace back to lower levels.

The FTSE 250 has stormed ahead again; after a 2 week pause at the 8888 level resistance it has rushed upwards again and has hit its head on the resistance at the 9153 level – up 66.67% up from the March low.

Now, because of these overhead resistance levels and particularly because of the 9-week cycle that had, we calculated, to play its part, we have held back over the past few weeks from suggesting any new ‘buys’ as there would be no point in enjoying a short ride up only to get caught by a potentially sharp move down again.(*but see special note below). So, the question now is – were we right? Will the 9-week cycle play its part and send share prices back down again? Or will we end up with a lot of egg on our faces as the market continues to race away upwards? We will not have long to find out. This week’s market activity may be indecisive but the next week or two or three will show how right or wrong we have been. We remain concerned that October may visit some dire moves upon the stock markets. Frankly we hope that we are wrong as the potential for a disaster on the markets is real.

*Note, this comment is, of course, relevant to our current ‘long term’ (‘Investor’) methodology. With the advent of the new short term (‘Trader’ Alerts) service (which we hope to launch withing the next 7 to 10 days) there is potential for short term gains and less risk of losing profits via a sharp downturn (as an indication; the test ‘Trader’ service that we have been running for the last 10 weeks has produced over 35% growth on a CFD £20k account).